Chapter

12
Addressing
Competition and
Driving Growth

Cours Syllabus Covering Chapters:

Pre to Midterms: 01, 04, 09, 10, also 12
For Final Exam: 13, 15, 16, 17, and 19

Learning Objectives
1. Why is it important for companies to grow the core of
their business?
2. How can market leaders expand the total market and
defend market share?
3. How should market challengers attack market leaders?
4. How can market followers or nichers compete
effectively?
5. What marketing strategies are appropriate at each
stage of the product life cycle?
6. How should marketers adjust their strategies and
tactics during slow economic growth?
 THE MARKETING PROCESS

Growth Strategies
• Building your MARKET • International EXPANSION
SHARE
• Acquisitions, MERGERS,
• Developing COMMITTED and ALLIANCES
CUSTOMERS &
• Building an outstanding
stakeholders reputation for SOCIAL
• Building a POWERFUL RESPONSIBILITY
BRAND
• Partnering with
• Innovating NEW GOVERNMENT and NGOs
PRODUCTS, services, &
experiences
 Growing The Core

Make the core of the BRAND as

Distinctive as possible “Your Partner in Chocolate
Indulgence”

Drive DISTRIBUTION through both

Existing and New channels Drive-through, Vending
Machines …etc.

Offer the core PRODUCT in new

Formats or Versions

Growing The Core

Market Market
Position Progression
 Competitive Strategies
for Market Leaders
• Expanding total MARKET DEMAND

• PROTECTING current MARKET SHARE

• Increasing MARKET SHARE even

with constant market size

Expanding Total Market Demand

• New Customers
• More Usage
 Protecting Market Share

• Proactive Marketing
– Responsive Anticipation

– Creative Anticipation

https://investors.coca-colacompany.com/strategy

Protecting Market Share

• Defensive Marketing Strategy

Protect a weak front

Signals competitors
not to attack
Making the brand
almost invincible Reassigning
Attacker pulls back resources
for defense

Stretches over new

territories through
diversification.
 Increasing Market Share
• The cost of buying higher market share
through acquisition may far exceed its
revenue value

Possibility of provoking
Economic cost
antitrust action

Pursuing wrong Increased market share

marketing activities effect on quality

Optimal Market Share

 Competitive Strategies
for Market Challenger
• Define strategic objective,
usually to INCREASE OWN MARKET
SHARE.

• Must decide WHOM TO ATTACK.

MARKET-CHALLENGER STRATEGIES

• Defining the strategic objective and opponent(s)

A market challenger can attack:

✓ The market leader
✓ Underfunded firms its own size
✓ Small local and regional firms
✓ The status quo
MARKET-CHALLENGER STRATEGIES

• Choosing a General Attack Strategy

Small, intermittent attack
to harass the opponent

Identifying shifts
that cause gaps

Grand offensive
Matching opponent on several fronts
key strengths

Attack easier weak fronts

Market-Follower Strategies
COPY the leader’s products,
package, design, even
Cloner sometimes the name with only
slight variations

COPY some things from the

leader but differentiates on others
Imitator such as packaging, advertising,
pricing, or location.

TAKES the leader’s products and

adapts or improves them. The
Adapter adapter may choose to sell to
different markets, but often it
grows into a future challenger.
MARKET-NICHER STRATEGIES
• Become a LEADER in your small market
– Firms with low shares of the total market can
become highly profitable through smart
niching

Niche Specialist Roles

End-user Vertical-level
specialist specialist

Customer-
Channel size
specialist specialist

Job-shop Geographic
specialist specialist
 Growing The Core

Market Market
Position Progression

PRODUCT LIFE-CYCLE MARKETING

STRATEGIES
• A company’s
positioning and
differentiation
strategy MUST
CHANGE as its
product, market, and
competitors change
over the PLC
 PRODUCT LIFE-CYCLE
• Product Life Cycle: progression of products
through introduction, growth, maturity, and
decline stages

PRODUCT LIFE-CYCLE MARKETING

STRATEGIES
PRODUCT LIFE-CYCLE MARKETING
STRATEGIES
Marketing Strategies: Introduction Stage

• Pioneering Advantages
– Recall of brand name
– Establishes product class attributes
– Captures more uses in middle of market
• Pioneering Drawbacks
– Imitators can surpass innovators
– Once leadership is lost, it’s rarely regained

Long-Range Product Market

Expansion Strategy
Marketing Strategies: Growth Stage
• To sustain rapid market share growth now:
– Improve PRODUCT QUALITY and add new features
– Add NEW MODELS and flanker products
– Enter NEW MARKET segments
– Increase distribution COVERAGE and enter NEW
DISTRIBUTION CHANNELS
– Shift from awareness and trial communications to
PREFERENCE and LOYALTY communications
– Lower prices to ATTRACT THE NEXT LAYER of price-
sensitive BUYERS

Marketing Strategies: Maturity Stage

Market Modification Number of Users/Usage

Improved Versions
Product Modification Quality/Features

Marketing Program Modifying Non-Product

Modification Elements
 Market Modification

Marketing Strategies: Decline Stage

• Eliminating Weak Products

• Harvesting and Divesting
Marketing in a Slow-Growth Economy

✓ Explore upside of increasing investment

✓ Get closer to customers
✓ Review budget allocations
✓ Put forth compelling value proposition
✓ Fine-tune brand and product offerings